📊 The relationship between price and trading volumes

1️⃣ Strength of the uptrend

Price rises with an increase in trading volumes → Indicates positive momentum and continuation of the trend.

2️⃣ Near the end of the uptrend

Price rises with a decrease in trading volumes → Sign of potential weakness of buyers and approaching distribution.

3️⃣ Strength of the downtrend

Price falls with an increase in trading volumes → Indicates strong selling momentum and continuation of the decline.

4️⃣ Near the end of the downtrend

Price falls with a decrease in trading volumes → Sign of potential weakness of sellers and approaching formation of a bottom.

5️⃣ Indicators of the end of the rise

Very high volume appears at peaks or after a rising wave → Indicates strong selling and distribution.

6️⃣ Indicators of the end of the decline

Very high volume appears at troughs or after a falling wave → Indicates the entrance of liquidity and strong buying.

✍️ These rules are fundamental to technical analysis for understanding the balance of market forces between buyers and sellers, and distinguishing between trend continuation or reversal.

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